Money guru Martin Lewis said people should put a date in their calendars for fixed energy deal contracts (Image: X)
Martin Lewis, the personal finance guru, has issued a 50-day warning to anyone on a fixed rate energy deal. In an ‘urgent’ post, Mr Lewis informed customers with fixed tariffs from providers such as E.on, OVO, Octopus, British Gas, NPower, Outfox the Market and SSE that they could break free from their deals if they wish – at a specific time.
In a video post, he revealed a little-known trick to avoid exit fees while still hunting for the best market deals. He stated: “A quick energy need to know if you’re on a fixed tariff or thinking of getting one.
“They cannot charge you early exit fees if you leave a fix within the last 50 days. So from day 49 onwards, no early exit penalties. You’re absolutely. Free to leave if you choose to. So it’s a very good idea to work out when your fix ends and put 50 days beforehand in your diary to do a comparison to see if you can then find anything cheaper. If you can, you’re free to switch and they can’t lock you in with penalties. If you can’t, stay where you are and milk it out till the last moment.”
Households are bracing for a 6.4% surge in their energy bills from April amid plans to extend a £150 discount to around three million more homes.
Ofgem announced the increase to the price cap, which will push the average bill for households in England, Scotland and Wales on a standard variable tariff from the current £1,738 a year to £1,849, following a recent surge in wholesale prices.
Quick tip if you’re on or are getting an energy fixed tariff…
— Martin Lewis (@MartinSLewis)
The increase will amount to an additional £111 per year for an average household, or approximately £9.25 a month, over the three-month duration of the price cap. This is 9.4% or £159 higher than this time last year but £531 or 22% lower than at the peak of the energy crisis at the beginning of 2023.
Discussing the price cap on This Morning last week and the potential for further increases, Mr Lewis stated: “We talked last week about [how] the energy price cap is going up 6.4% on the 1st of April. Many people think that fixed rates go up as well. They don’t.
“Just [to] be slightly complicated… The energy price cap is set on past wholesale rates. The April energy price cap is set on wholesale rates between the middle of November and the middle of February. They went up so it’s gone up.
“What the rate you can fix at is based on the rate that energy providers can currently buy in energy for the next year. Now that does’ t move in sync with the price cap.
“I can’t tell you what the situation may be in May. Look, you know, if there is peace in and Russian gas supplies are turned back on, energy prices will be a lot lower then. You will be able to fix at a much lower price than it is now. If the opposite and it looks like we are going to continue to be entrenched in that situation, then energy prices – or Russian supply isn’t back on – energy prices will be higher.
“So I cant tell you what the situation will be in May because it’s simply an unknowable. But I can say the likelihood is, right now, I would suspect your fix is very cheap so you probably want to keep it running as long as you possibly can.”